Having held up passage of the emergency $2 trillion coronavirus rescue bill, Speaker Nancy Pelosi has turned her gaze to the next rescue bill.

In an interview with the New York Times Pelosi proposed that a fourth rescue bill roll back the limit on the state and local tax deduction, or SALT.

Finally, Nancy Pelosi has found a tax she doesn’t like.

But it only affects rich people in blue states.

The Wall Street Journal explains:  

In the 2017 tax reform, Republicans limited the state and local tax deduction to $10,000. That raised federal tax revenue mostly from high-tax parts of states like California, New York and New Jersey and helped pay for the rate cuts on corporate, small business and individual incomes.

According to the Tax Foundation, the cap raised almost $33 billion in 2018 from those earning more than $1 million per year and had little impact for those earning less than $100,000.

Rolling back SALT would be a twofer for blue states—in addition to helping their rich people, it would enable profligate states to just keep spending:

Blowing up the state and local tax deduction would reduce the tax base and increase pressure for higher tax rates.

It would also make it easier for poorly governed states to rely on soaking their high earners through capital-gains and income taxes, because the federal deduction would ease the burden.

Capital gains tax, as the editorial notes, won’t bring in nearly so much money in the immediate wake of the coronavirus outbreak. And it would be a bureaucratic nightmare:

“We could reverse that for 2018 and 2019 so that people could refile their taxes” and receive more money back from the government, Ms. Pelosi said in the interview. “They’d have more disposable income, which is the lifeblood of our economy, a consumer economy that we are.”

You’ve got to give this to Speaker Pelosi: she might suffer a setback, but she never gives up. Senator Pat Toomey said it all:  

“The ink is hardly dry on a $2 trillion-plus emergency package,” said Senator Patrick J. Toomey, Republican of Pennsylvania. “It’s far too soon to know whether and of what nature additional legislation is needed. If we determine that another measure is necessary, it should not be the vehicle for Speaker Pelosi’s partisan, parochial wish list.”

Even the New York Times could not ignore the contrast of a SALT rollback with the payment for working men and women in the rescue bill that passed over Pelosi’s delaying tactics:

That is a contrast with the bill Mr. Trump signed on Friday, which began to phase out direct payments for households earning $150,000 or more.

Ms. Pelosi’s proposal represents “the way to get money into the hands of people who don’t benefit from the $1,200 checks because they make too much money,” said Kyle Pomerleau, a resident fellow at the conservative American Enterprise Institute. “It certainly gets money into hands. But I’m not sure it’s the correct hands.”